General Dynamics Corp. (GD), a provider of aerospace and defense products and services, said Tuesday it signed a definitive deal to acquire Zurich, Switzerland-based Jet Aviation from Dreamliner Lux S.a.r.l., a firm controlled by Permira Funds, for CHF 2.45 billion, or about US$2.25 billion, in cash. The proposed acquisition is expected to close by the end of 2008.
General Dynamics said the transaction would be immediately accretive to its earnings and that the Jet Aviation's current management will remain in place.
Upon completion of the acquisition, Jet Aviation will become a new business unit within the General Dynamics Aerospace group, operating under the Jet Aviation and Midcoast Aviation brands.
Jet Aviation, founded in Switzerland in 1967, is a business-aviation services company, with nearly 5,600 employees and operations from 25 airport facilities throughout Europe, the Middle East, Asia and North and South America. In the past three years, under the control of the Permira Funds, Jet Aviation has been developed from a family-owned business to a major provider of business aviation services.
Jet Aviation's services include maintenance, repair and overhaul, completions and refurbishments, engineering, fixed base operations, or FBO, aircraft management, flight support and global executive-jet charter services, aircraft sales and acquisitions, and personnel services.
Commenting on the acquisition of Jet Aviation, Nicholas Chabraja, General Dynamics chairman and chief executive officer, said, "Through General Dynamics' acquisition of this strong and rapidly growing organization, we will expand our participation in the business-aviation industry well beyond that of our current operations."
General Dynamics, headquartered in Falls Church, Virginia, said it anticipates 2008 revenues of about $29.5 billion.
The company, on August 14, announced the receipt of a contract worth $20.9 million from the U.S. Army TACOM Life Cycle Management Command for Abrams Tank Systems Technical Support or STS. On the same day, the U.S. Army Field Support Command at Rock Island, Illinois, awarded the company a $34.8 million modification to an existing demilitarization contract in its Ordnance and Tactical Systems unit.
On August 13, the company said that it has received a $37 million contract for the qualification and production of reactive armor side skirt tiles for the Bradley Fighting Vehicle System from the U.S. Army Armament Research, Development and Engineering Center.
For the recently closed second quarter, General Dynamics' second-quarter profit was up 25%, driven by strong sales of combat vehicles and business jets.
Among General Dynamics' peers, Lockheed Martin Corp. (LMT) said in early August that its subsidiary has entered into a contract to acquire Tenix Group's interest in RLM Holdings Pty Ltd., a radar systems engineering and integration and logistics management business headquartered in Adelaide, Australia. Terms of the deal were not disclosed.
GD closed Monday's trading at $92.24, down $1.17, on a volume of 1.85 million shares.
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